NEW DELHI (Reuters) - The Supreme Court on Friday rejected another proposal by the Sahara conglomerate to secure the release of its jailed chairman Subrata Roy by refunding billions of dollars the company had raised from investors in a now outlawed bond scheme.

Sahara Chairman Roy, 65, was arrested last Friday for failing to appear at a hearing in the long-running case that pits the unlisted group against the securities regulator, the Securities and Exchange Board of India (SEBI).

SEBI had brought contempt proceedings against Roy and Sahara for failure to comply with a 2012 Supreme Court order to repay billions of dollars to investors. Sahara has said it repaid most investors and that its remaining liability was less than the 51.2 billion rupees it deposited with SEBI, a claim that has been disputed by the regulator and the court.

Roy was sent to jail on Tuesday. On Friday, lawyers for Sahara told the court the company was ready to pay 25 billion rupees initially, and then an additional 149 billion rupees in five instalments through July 2015, to secure Roy's release.

The court rejected the proposal as unsatisfactory and told Sahara to come up with another plan at the next hearing on March 11, Keshav Mohan, one of the lawyers representing Sahara in the case, told Reuters.

The final figure owed by Sahara is unclear because of interest accrued, as well as a dispute between the group and the regulator over the veracity of investors.

The court had on Tuesday rejected an offer by the lawyers to give bank guarantees for 225 billion rupees within three to six months.

Sahara is best known as the former main sponsor of India's national cricket team, as well as owner of New York's Plaza Hotel and London's Grosvenor House. It has a net worth of $11 billion and more than 36,000 acres of real estate, according to its website. It also co-owns the Sahara Force India Formula One auto racing team with liquor baron Vijay Mallya.

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